ARI - Alpaca Registry Inc.

Dear ARI & AOBA Members:

The ARI and AOBA Boards of Directors want to provide you an update on the industry strategic planning process that has been taking place between our two organizations.

As previously discussed in our eBlast at the beginning of March, we met together in February in Houston to work through a detailed analysis of the current state of the industry and to discuss where we should be moving in the future. During that meeting, we discussed several ways in which ARI and AOBA could work together. A vote including both Boards was taken with unanimous support for a unified vision. At the conclusion of that first meeting, three committees were formed that contained two Board members from each Board. Each committee was tasked with reviewing a potential organizational model for moving ARI, AOBA and the industry forward. The three models reviewed were: 1.) Merger/consolidation; 2.) Holding Company; and 3.) Strategic Partnership. The committees spent several weeks discussing, researching, and outlining those options.

Our two Boards met again in late March in Atlanta to continue our discussions. At this meeting each of the committees presented their respective organizational model to the ARI and AOBA Boards, as well as their recommendations with regard to that model. The Boards spent time discussing each of the models and answering questions that arose. The AOBA Board majority voted to pursue a holding company as they considered that model best addressed the concerns expressed by the ARI Board at the Houston meeting. A strong AOBA Board minority favored merger/consolidation. ARI’s unanimous preference was to pursue a Strategic Partnership, the only model which would by definition mean that the two organizations would remain separate. The Boards were unable to reach a consensus on which would be the best option to further pursue before the meeting ended.

Since that meeting, the Board Presidents have continued to communicate with each other and the Boards have discussed what the next steps in the process should be. We are currently working to determine the best path forward and are committed to working with one another in the best interests of the industry.

We understand that this process is not a quick one and will continue to keep you informed of our progress. We ask for your patience and understanding as we bring the newly elected Directors into this discussion. It is imperative that we as Boards, and you as our members, take the time to consider all available options so that we can find the most effective way forward that provides the highest level of success for ARI, AOBA, our members, and the long term viability of the industry.

Sincerely,